Template Shared with Treasury and SBA to Help Resolve Outstanding Issues in Process
The American Institute of CPAs has created a loan forgiveness calculator for the Paycheck Protection Program (PPP), the main small business relief vehicle under the CARES Act, and shared it with the Treasury Department and Small Business Administration. Questions surrounding loan forgiveness have been a major stumbling block to successful PPP implementation, and the AICPA calculator is designed to resolve many of these issues.
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“Our goal is to provide a consistent, commonly accepted approach to loan forgiveness calculations”
The calculator is based on existing PPP guidance from the Treasury and SBA, as well as additional recommendations from the AICPA. Both the calculator and the underlying recommendations have been made in consultation with an AICPA-led small business funding coalition whose members provide services and support to businesses that employ more than 75 million people.
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The AICPA has ties to 44,000 CPA firms, and they and their small business clients have been requesting loan forgiveness guidance since the start of the CARES Act implementation. If Treasury does not release guidance by Friday, the AICPA plans to post the calculator as a resource for its members and their clients.
“Our goal is to provide a consistent, commonly accepted approach to loan forgiveness calculations,” said Mark Koziel, CPA, CGMA, the AICPA’s executive vice president of firm services. “Small businesses have been waiting for guidance and they can’t wait any longer.”
Small businesses can have their PPP loans forgiven in full if the funds were used for eligible expenses over an 8-week period and other criteria are met. The amount of the loan forgiveness may be reduced based on the percentage of eligible costs attributable to non-payroll costs, any decrease in employee headcount and decreases in salaries or wages per employee.
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